What is wage distortion?

It was only on June 9, 1989, upon the enactment of R.A. No. 6727 (Wage Rationalization Act, amending, among others, Article 124 of the Labor Code), that the term "wage distortion" came to be explicitly defined as: "a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation." [G.R. No. 108556. November 19, 1996]